The companies set up the Ascendas India Growth Programme
with a target size of S$600 million with GIC being the principal
investor, they said in a joint e-mailed statement today. The
fund will invest in business space in Bangalore, Chennai, New
Delhi and surrounding areas, Hyderabad, Mumbai and Pune,
according to the statement.

Institutional investors are increasing allocations to real
estate as part of efforts to diversify portfolios and boost
returns. The value of investments by state funds like GIC in
alternative assets including property rose 26 percent in the
past year, Invesco Ltd. said in September, citing a survey of 29
sovereign funds controlling about 80 percent of the assets.

“The likes of Blackstone Group LP, Ascendas, Xander Group
Inc. and GIC are among investors who are looking at putting
together a string of commercial assets,” Shashank Jain,
executive director of transaction services at PwC, said in a
phone interview from Mumbai. “They are looking at a stable
yield-generating asset portfolio.”

Investing in alternative assets like real estate “stems
from their potential to generate high long-term real returns and
their role of diversification in the portfolio,” GIC said in
its annual report published in August. The firm, which in March
2011 opened its India office in Mumbai, has already invested in
properties in New York City, Jakarta and London this year.

Overseas Properties

GIC is part of a group that’s buying the headquarters of
Time Warner Inc. in New York City, a person with direct
knowledge of the transaction said last week. The state fund said
last month it signed a pact to buy a 47-story office tower in
Jakarta’s central business district. It also was the purchaser
of Blackstone’s stake in London’s Broadgate office complex, two
people with knowledge of the transaction said in August.

Ascendas, based in Singapore, develops and manages business
space, according to the statement. The company manages the
Ascendas Real Estate Investment Trust, the Ascendas Hospitality
Trust and the Ascendas India Trust.